BlueScope invests $40m in steelworks project

BlueScope Steel has used the announcement of a massive profit turnaround to reveal a new $40 million project at its Port Kembla Steelworks.The development was revealed as managing director and chief executive Paul O'Malley reported a net profit after tax of $126 million for 2009-10, compared to a $66 million loss the previous year.Mr O'Malley said the $40 million investment in a steam injection station would improve steel production and quality.He said Illawarra contractors had already started work on the project that would help put additives into iron.‘‘Plate manufacturers both domestically and internationally want higher qualities of steel all the time,’’ Mr O’Malley said.‘‘This investment keeps our competitiveness in the high quality space ... because that is where, as a company, we have to go.’’Mr O’Malley said it was important to keep investing in BlueScope Steel’s crown jewel.And he revealed the company still wanted to build a cogeneration plant at Port Kembla worth more than $1 billion.‘‘We are developing a pretty comprehensive 20-year asset reinvestment plan,’’ he said.‘‘There are a lot of opportunities to increase the quality of our steel. Producing a steam injection station is a part of that. We have to do that to remain internationally competitive and we have got to do the steam cogen project at some point. Government policy is still a bit of a question mark there.’’Mr O’Malley said having the two blast furnaces and sinter plant at full operation at Port Kembla after the completion of the No 5 reline a year ago was a major contributor to the company’s performance.He acknowledged the Wollongong workforce and Illawarra contractors for their contribution and said the company would keep looking at ways to make further improvements at Port Kembla in the short term.Mr O’Malley said the increase in production since the recommissioning of No 5 blast furnace had helped increase business downstream, particularly in Asia.‘‘We delivered an outstanding improvement in our Asian businesses, including record profits in China, Indonesia, Malaysia and Vietnam.‘‘We also achieved a significant reduction in the company’s permanent cost base.‘‘Also encouraging was increasing demand in Australia, strong export sales and good earnings results both in New Zealand and at North Star BlueScope Steel, our steelmaking joint venture in the United States.’’BlueScope directors yesterday declared a 5¢ per share fully franked final ordinary dividend for shareholders.